HBOS says takeover by Lloyds TSB still on

LONDON (Reuters) - Britain's biggest mortgage provider HBOS Plc said the takeover of the bank by Lloyds TSB remained on, rejecting a report on Sunday that the deal had collapsed.

"The deal remains in place and is on track," said Shane O'Riordain, general manager of group communications for HBOS.

He declined to comment on whether the terms of the deal could be renegotiated, after reports it could be as both banks are expected to obtain capital from the government.

Sky Television earlier reported the deal had fallen through, without giving details.

(Reporting by Steve Slater)